Oman Air to fill Gulf Air void at Muscat

Oman Air is set to launch long-haul services following the Omani government's unexpected decision to withdraw as a Gulf Air shareholder.

The airline aims to begin connecting its Muscat base with European business centres such as Frankfurt and London and with Asian destinations such as Singapore, Kuala Lumpur and Bangkok by the end of this year.

Over the next few months Gulf Air will drop all long-haul services from Muscat, including its double daily service to London Heathrow, as it changes from a two-hub to a one-hub carrier.

Bahrain-based Gulf Air has operated multiple hubs since the Abu Dhabi, Bahrain, Omani and Qatari governments bought the carrier in 1973. Earlier this decade it dropped its Abu Dhabi and Doha hubs after the Abu Dhabi and Qatari governments sold their stakes in favour of launching their own flag carriers.

Oman Air, which currently operates seven narrowbodies and two turbo­props, plans to acquire five Airbus A330s. But the new A330s will not be delivered until 2009. As a short-term solution to its new widebody requirement the carrier says it plans to lease two Boeing 767s and one A330 by the end of the year.

Oman is keen to build connections from its Muscat base, not only to strengthen its tourism industry but also to prepare for the reduction in Gulf Air operations at Muscat. Oman and Bahrain had owned Gulf Air equally but the Omani government notified its partner in early May that it intended to pull out, kicking off a six-month withdrawal process.

Gulf Air admits the Omani move was a surprise but insists its newly-created business plan will remain largely unaffected by the change. Gulf Air says: "We were not expecting that. But we had our plans and, in this industry, you always assume a worst-case scenario."

The airline's restructuring programme led by new head Andre Dosé, launched in April with the axing of several long-haul destinations, had been built on a shift in the ownership of Gulf Air to 80:20 in favour of Bahrain.

This already involved a corresponding reduction in the volume of traffic at Muscat from the start of its new schedule at the beginning of July. Further cuts at Muscat are now expected to reflect Oman's full withdrawal, but have not yet been detailed.

Gulf Air is now in talks with several other carriers to explore potential codeshare arrangements. But its future relationship with Oman Air, with which it has a close partnership, is not clear.